Hiking council tax to fund social care ‘highly regressive and inequitable’, warns Tory grandee

Funding social care through increased council tax is “highly regressive and inequitable”, a Tory former Cabinet minister has warned.

Lord Forsyth of Drumlean (pictured) levelled his criticism with the lion’s share of a hike in investment recently announced by the Chancellor, expected to be raised by local authorities.

Jeremy Hunt said the social care sector will receive increases in funding of up to £2.8 billion next year and £4.7 billion the following year.

However, the central government contribution to this amounts to an additional £1 billion and £1.7 billion respectively.

The shortfall would be met by savings from delaying key social care reforms, including the imposition of a cost cap, and “more council tax flexibilities”.

While authorities must currently hold local referendums if they want to increase council tax by more than 3%, Mr Hunt announced in his autumn statement he will raise this to 5%.

In response, nearly all councils are expected to raise the levy by the full amount permitted annually, according to Treasury analysis.

Speaking at Westminster, Lord Forsyth, who previously chaired the Lords Economic Affairs Committee, said: “To try to fund social care by allowing for an increase in council tax is highly regressive and also inequitable, because the tax base for the local authorities where it is least is where the demand is greatest.”

Responding, health minister Lord Markham, himself a former councillor, said: “I am absolutely aware of the issue.”

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